Nvidia stock will replace Intel in the Dow Jones Industrial Average

Nvidia’s addition, effective Nov. 8, also marks a historic moment for the semiconductor industry as the AI ​​chip leader replaces a struggling rival Intelwhich has been listed in the Dow index since 1999.

S&P Dow Jones Indices, the company that runs the index, also said it would add paint makers Sherwin Williamsreplaces the chemical giant Dow.

Shares of Nvidia have risen over 180% this year as tech giants clamor for its powerful and expensive processors that support generative AI, the technology widely seen as the next phase of innovation.

Intel, one of Silicon Valley’s best-known companies, has seen its shares fall 50% so far this year as it struggles to keep up with the AI ​​boom.

The Dow Jones Industrial Average, created by Charles Dow in 1896, is often used as an indicator of the state of the US stock market, the largest in the world.

Unlike the S&P 500, which weights companies by market capitalization, the 30-stock Dow is price-weighted, meaning higher-valued stocks have a greater influence on its movements.

Technology company Apple, Microsoft, IBM, Salesforce And Cisco systems are currently in the index, while Google, Amazon and meta doesn’t.

The components of the DJIA are selected by a committee and typically favor companies that cover a wide range of industries and are well established.

This has historically excluded many tech giants, despite their size and influence.

With their high values, too many tech companies would drown out the influence of the other sectors represented in the index.